Burberry booms following Brit fragrance launch

Related tags Burberry License

Burberry, the UK fashion house, announced last week a 14 per cent
rise in underlying first-half sales, bolstered by strong retail
expansion and the launch of its Burberry Brit men's fragrance.

The figures were in line with expectations and sales, on a currency and comparison basis, were up by a reported 8 per cent. The company also confirmed that underlying retail sales increased by 12 per cent, following store openings in both the US and Korea.

Wholesale revenues, which accounted for 57 per cent of total income in the first half, increased 13 per cent with a solid performance in the US offset by more modest growth in Europe - with the UK issuing a particularly subdued performance. The company, however, is still expected to post a full-year pre tax profit of £160m.

"Burberry has again delivered a double digit revenue increase in the first half, benefiting from our balanced strategy by product, channel, and region. We were particularly encouraged by the 31 per cent in our licensing channel, partially driven by the highly successful launch of Burberry Brit for men"​, commented Burberry chief executive Rose Marie Bravo.

Last month, Bravo, who has been largely attributed to the group's successful turnaround, announced she is to extend her contract for another two years, which will now expire in July 2006.

The first half sales figures come following a busy week for Burberry, who also announced last week that it has extended a licensing agreement with Paris-based Inter Parfums, which will replace its existing fragrance licence, and last until 2016. Subject to mutual consent, the company has also secured an option to extend it by an additional 5 years, which Bravo claims will deliver "ongoing financial and marketing benefits"​ for Burberry.

According to Jean Madar, chairman and CEO of Inter Parfums, "the new license includes rights for other related skin care and personal care categories which bring additional opportunities for our company".

Inter Parfums has also confirmed that it is to create a dedicated Burberry Fragrances operating unit, in a bid to "fine tune" its operating model, which it hopes will increase selling prices, modify cost sharing with suppliers and distributors, and also encourage the future formation of joint ventures or company-owned subsidiaries within key markets.

"As a result of the growing recognition of the Burberry brand and the planned marketing investment, Burberry Fragrances is well positioned to enjoy strong growth and become one of the worlds leading fragrance providers",​said Madar.

Related topics Business & Financial Fragrance

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